PIC boss’s dodgy R1bn Mozambican deal

Public Investment Corporation (PIC) chief executive officer Dr Dan Matjila has authorised an investment to the tune of nearly R1bn in a dilapidated Mozambican oil refinery plant that is not operational, years after a massive cash injection.

WeeklyXposé can today reveal that apart from injecting $63m (about R812m) for a 50% stake in S&S Oil Refinery based in Nacala in Northern Province of Mozambique in 2014, the PIC, which is responsible for about R1.8-trillion of government pension and social security funds, also paid millions in facilitation fees to a company called Indiafrec Trade & Investment (Pty) Ltd, whose directors are listed as Indian-born Ameer Mirza and Siyabonga Nene, whose father Nhlanhla Nene was finance minister when the PIC made the investment.

WeeklyXposé has learnt from impeccable sources that Siyabonga and Mirza approached PIC for an equity loan funding for their equity portion in the Mozambican oil refinery and that Mirza introduced the PIC to the opportunity. “The PIC did it’s due diligence on the target company, S&S Oil Refinery and then decided to buy at least 30% of equity and provide other funds as shareholders’ debt and further to provide the consortium to buy its equity and provide another debt to the consortium as shareholders debt,” said the source.

“Things fell apart between target company owner and the sponsor. The PIC then took over the relationship and bought the equity for itself.” It is alleged Mirza was kicked out but he demanded a facilitation fee as he was the one who introduced S&S Oil Refinery to the PIC. It is also claimed that Mirza also demanded to be paid for his shareholding, the money the PIC paid but never reached Mirza.

Sources told WeeklyXposé that subsequent to this, a relationship started between S&S Oil Refinery owner Rassul Momade and Matjila. It is alleged the relationship got so intense between the two men that a further $10m (about R128m) was approved by Matjila for further equity acquisition in the plant. “Working capital facilities had been accorded to this investment but the project has not even started to produce oil,” said the source. WeeklyXposé tried to trace Mirza, but the Fordsburg Towers address registered as his company’s did not exist and none of the tenants knew him and his company, Indiafrec Trade & Investment.

Attempts to contact Siyabonga Nene also drew a blank. WeeklyXposé reached Momade on his mobile phone and asked him why the plant was not operating despite the PIC having pumped millions into his company. Momade claimed he couldn’t speak English and asked WeeklyXposé to contact him after 30 minutes when he would be in the company of an interpreter. When called after half an hour as per his request, Momade’s phone was off. He did not respond to multiple voice messages left on his mobile phone.

WeeklyXposé emailed a list of questions to Matjila, who, through his spokesman Sekgoela Sekgoela, confirmed that Mirza did indeed introduce S&S Refinery to the PIC and that the PIC expressed its interest in participating in the company. “The PIC invested US$63 million and has paid a facilitation fee to Mr Amir Mirza for referring the project to PIC as per industry practice.”

Sekgoela added that Mirza negotiated with Momade to purchase shares into S&S Oil Refinery, “however, as far as we are aware, this did not materialise as Mr Mirza could not raise the necessary funding”. “Apart from the investment made by PIC, no further funds were injected into the project nor payments made to any party for the benefit of Mr Mirza.” Despite numerous sources both within the PIC and S&S Oil Refinery telling WeeklyXposé that the facility was dilapidated and not operational, Sekgoela was adamant that “the factory has state of the art technology and has been fully commissioned”. “It continues to produce and sell edible refined oil. However, like any start-up project, it will take some time to reach full production capacity.”

Sekgoela said plans were afoot to bring the project to full production capacity. “Dr Matjila is shareholder representative of the PIC in S&S Refinery and does not have any personal relationship with Mr Rassul,” Sekgoela said.

WeeklyXposé is an online newspaper with a mission to bring you stories that mainstream media would hesitate to bring to your screens over morning coffee. We highlight key issues plaguing our country and the world, while serving the best of entertainment and motoring news. Every week we will bring you an Xposé, something you won't find anywhere else. Keep watching this space and coming back for more.

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WeeklyXposé is an online newspaper with a mission to bring you stories that mainstream media would hesitate to bring to your screens over morning coffee. We highlight key issues plaguing our country and the world, while serving news as it happens. Every week we will bring you an Xposé, something you won't find anywhere else. Keep watching this space and coming back for more.